There are many problems still to be solved if the government’s ‘right to provide’ is to succeed, delegates at the social enterprise conference Voice11 were told this week.
The right to provide is intended to allow public sector workers to transfer their services into independent mutuals and social enterprises.
But Dan Gregory, a consultant working with organisations interested in doing this, told the conference that the government had failed to learn the lessons from the ‘right to request’. This was a similar programme, developed by the Labour government, which applied only in some health organisations and resulted in 25,000 NHS being staff spun out into social enterprises.
"At present they’ve not done a lot of the things that made the right to request a success," he said.
"It’s not clear that staff in local councils will have the right to uncontested contracts. According to the Localism Bill, all that happens if they put in a challenge is that a procurement process is triggered.
"That’s not very helpful. It’s very difficult to tender for something before your organisation exists."
Gregory said the new social enterprises would also need business support and start-up funds, but these were currently not in place, although a £10m support fund has been promised by the government.
Lance Gardner, director of care at North East Lincolnshire Care Trust Plus, which is in the process of becoming an independent social enterprise under the right to request, told the conference that an appeals process for employees was required.
If a local authority rejected a request under the right to provide, there was no recourse for employees, he said.
"We need an ombudsman to do that," Gardner said. "Under the right to request, that was done by the strategic health authority and, because it existed, it didn’t need to be enforced.
"I think a lot of local authorities will just say no, because this is a lot of risk and a lot of work."
He said there were also big questions about which assets new mutuals were entitled to, and how overhead costs should be managed.
"There’s an expectation that mutuals will be cheaper, and that’s probably true in the medium to long term," Gardner said.
"But there are high start-up costs, because things like insurance cost five times as much for a new organisation, and these will need to be met."
Hazel Blears, the former communities secretary, told the conference at a different session that she feared the right to provide could be used as a way to privatise services by stealth.
"I believe there are some individuals in government who want to take these services out of state provision and into the private sector," she said.
"They see social enterprises as a halfway house to get people used to privatisation. They want to see social enterprises fail, then open it up to the private sector."